Placentia’s upgraded credit rating is having an immediate impact on city projects, including the financing of $1.8 million for new fire apparatus, city officials say.
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In November, S&P Global ratcheted up the city’s rating by three notches to BBB+, a move that enables Placentia to get better financing rates.
“Our credit rating had not been looked at for six years, so this is a really big deal for the city. It helps us with financing different projects,” said Mayor Rhonda Shader during a November City Council meeting, announcing the city’s upgraded credit rating.
At a following meeting, the council unanimously approved $1.8 million for the purchase of a new fire truck and other items to fully equip the machine.
“We’ve actually received a rate of 2.69%, the lowest interest rate available in the market” for the financing of the equipment, City Administrator Damien Arrula told the council.
According to S&P Global’s website, the company uses 17 ratings with letter grades which are ranked from D, being the worst, to AAA. The scale is expanded by doubling or tripling letters, the more the better. The letters can also include plus or minus signs to indicate the level of the rating.